INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Lack of enquiry -

CIT invoked jurisdiction under section 263 on the ground that despite being in possession of material seized during the course of search on S.K. Jain Group from which it was clearly evident that share capital introduced by assessee was an accommodation entry, neither confronted assessee with the seized material nor obtained any explanation either from assessee or from directors of the share applicants who were examined by him under section 131.Held: Once information and material in hard copy and in form of CD was made available to AO, the should have verified genuineness of concerned transaction and also should have carried out adequate enquiry to come to a logical conclusion that either there was no accommodation entry and contents found qua the assessee being one of false or bogus; or assessee had amply substantiated genuineness of impugned transaction. In absence of such a mandate which was cast upon AO, assessment order was not only erroneous but also prejudicial to the interest of revenue. CIT had rightly exercised jurisdiction under section 263.

Relied:Daniel Merchants Pvt. Ltd. v. ITO in Appeal No. 2396/2017 dt. 29-11-2017 : 2017 TaxPub(DT) 5217 (SC) Raj Mandir Estates Pvt. Ltd (2016) 386 ITR 162 (Cal) : 2016 TaxPub(DT) 2834 (Cal-HC), Pragati Financial Management Ltd. 2017 (3) TMI-1242 dt. 7-3-2017 : 2017 TaxPub(DT) 1246 (Cal-HC) and Subhalaxmi Vanijya Ltd. (2015) 43 ITR (Trib) 48 (Kol) : 2015 TaxPub(DT) 2950 (Kol-Trib).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2007-08

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